Cabby-owned Taxi Cooperatives on the Rise

While the struggle between taxi companies and ridesharing startups like Uber grab all the headlines, a pioneering group of cabbies are combining the best of traditional taxi service and new ridesharing systems, but with an important twist. These cabbies are creating cabby-owned taxi cooperatives, sometimes with the help of unions, and offering smartphone taxi hailing on top of a traditional service. This new setup gives drivers more job security, better pay, ownership of and a say in their company as well as the ability to offer more convenient smartphone hailing taxi service to customers. This is part of a surge of experimentation in democratizing ownership in enterprises, including, appropriately, in the sharing economy.

In 2007, Denver taxi drivers joined Communications Workers of America Local 7777. In 2009, they launched the city’s first taxi driver-owned worker’s cooperative: Union Taxi. Five years down the road, a new bunch taxi drivers, tired of the high cab leasing fees and poor working conditions at traditional cab companies, started clamoring to organize another cooperative in Denver. They joined CWA Local 7777 and are in the process of launching a new worker-led company.

These are just two examples of new taxi cooperatives, part a larger trend toward community ownership of all kinds of enterprises. In addition, taxi cooperatives represents an important, yet little-known option for cabbies and ridesharing drivers who face deteriorating pay and working conditions. In fact, Lyft and Uber are arguably partly responsible for creating the market conditions that lead to the formation of taxi cooperatives.

To learn more about the trend toward driver-run cooperatives, Shareable spoke with Lisa Bolton, president of CWA Local 7777, who is helping to organize the second cabby-owned taxi cooperative in Denver, Colorado.

Shareable: What's your role in the union?

Lisa Bolton: I am the president of CWA Local 7777 [in Denver, Colorado], which stands for Communications Workers of America. That's what's called an amalgamated local. We have all different bargaining units and all different kinds of members in our local.

Traditionally, the CWA was mostly phone company workers. As time's gone on, we've organized all different areas. So we have all different types of people. In my local, we have telephone workers. We have the public sector -- Denver Public School Custodians. We have some caterers. We have 11 different industries. We have approximately 3,000 members right now.

What’s the history of Local 7777’s work with taxi drivers?

Back in 2007, I wasn't president. I was the executive vice-president. We did an affiliation agreement with a nonprofit called ProTaxi. That was a group of taxi drivers that were looking to organize to deal with some of their issues on the job: discrimination, being treated poorly, etc.

The CWA 7777 president, in 2007, signed an affiliation agreement with the drivers and they became CWA members. After that, the taxi drivers wanted to start their own company, which would be a co-op. And so we supported them by helping them lobby at the state capitol, going to hearings at the PUC (the Public Utilities Commission), coalition-building, things like that. It took until 2009, when they [the drivers] finally got granted permission or granted authority from the PUC to start their own company.

In May of 2009, Union Taxi opened its doors for business. There were 262 taxi drivers that were part of a worker owned cooperative, and they were also CWA members. They have been up and running since May of 2009.

Recently, we had heard that other drivers wanted to organize because of their working conditions. They also wanted to start another cooperative. On September 20, we held a meeting here at the union hall. We asked any interested drivers that wanted to join CWA to come meet with us to talk. We had a few people show up. I think we signed up with 49 people that day. And then the word started getting out that Quad-7 -- that is what we're known as, because of 7777, four sevens -- was having a membership drive. People started coming in droves. Drivers just started coming like crazy. Right now there's about 1020 new members.

Wow.

Yeah. In a very short time. We knew that the drivers were also interested in starting their own co-op. We held a meeting at South High School [in South Denver], because we knew we had to accommodate a lot of people, and we didn't have the facility here at the Union Hall. So, we held the meeting at South High School and about 350 people came, all drivers, and they elected a temporary board of directors so they could start working on their co-op. They also decided that they would give people 30 days to come up with $500 as their first commitment to see who was serious about starting the co-op.

One really big thing I need to make sure is clear in the article is that CWA has nothing to do with the actual business of the co-op. We're completely separate from the co-op. We aren't in business to do business. We are a representative of people. So, we're just helping guide them in reinventing what we supported for Union Taxi.

They will have to make all their own business decisions, hire their own attorneys to go to the PUC and stuff like that. We will help them lobby. We'll help them fight for their cause. We'll help with support as needed.

At this point, there are about 490 people as of yesterday [November 17] that have pledged their first $500 to get the business started. That will be managed by three people, out of seven, on their board of directors. They [the company] will be bonded and insured. They'll start looking for a regulatory attorney. They'll start drafting bylaws. The temporary board of directors is for 90 days. We will probably assist them, if they want us to, in the election process to elect their first permanent board of directors. They'll be able to do it however they want. We're basically support for them.

What is the relationship between taxi drivers and the traditional taxi companies? Do the drivers have representation through the union?

See, taxi drivers are independent contractors. They can't formally vote in the union for me to go bargain with, let's say, Yellow Cab, one of the cab companies here. Yellow Cab wouldn't have to recognize us legally, because they [the drivers] are independent contractors. However, if our Union Taxi members are having an issue at the airport, like ground transportation is doing something that they [the drivers] have a problem with, we will step in and make calls and set meetings and bring it to the Mayor’s attention and go to city council. We are really kind of a liaison without a formal bargaining agreement.

With this new co-op, I am really going to push that they have a collective bargaining agreement, because then we're the legal representative, and we could go on their behalf and say, “Look these are our members. We have a collective bargaining agreement with them, and these are the issues that we're facing.” So, the collective bargaining agreement also helps the co-op with internal problems. It protects the one worker in the process of the company.

Talk about some of the issues taxi drivers have been facing and the need for the union?

Last year, Uber and Lyft, known as Transportation Network Companies or TNCs, came in and wanted to break into the Denver market, so they ran some legislation that could have really hurt our taxi driver members as well as any taxi drivers. So we were concerned about the people issues: the background checks, the treating everybody fairly, being available for disabled customers and low-income customers. There is a lot of controversy over how the insurance works.

If you're an Uber driver, there is what's called a gap between when you don't have a customer in your car and you're going to get a customer; or you're dropping a customer off and you're still working but you don't have a client in your car. There is this gap in coverage where your personal insurance won't cover you, and possibly your Uber insurance won't cover you.

What happened last year is that we had a really interesting coalition at the [state] Capitol. We had the banking industry, the insurance industry, the PUC and all the existing taxi companies all opposed to this TNC legislation, all for different reasons, but nonetheless, we were all opposed. So we formed a coalition together and we tried to get in amendments that we wanted to see to make it more of a fair playing field. And we were successful in getting some of the amendments in. But the big thing was that most of the rule making did get put onto the PUC’s hands. The PUC understands the industry and public safety and things like that. That was one of the biggest things that's happening right now is this Uber and Lyft thing.

Also, for example, the airport is one of the highest revenue fares for drivers, because our airport is pretty far away. We were instrumental in trying to get a system together that would be more fair for all the companies and our members from Union Taxi. We talked to Denver City Council, Airport Authority, the Mayor's Office, and they formed a taxi-limo commission for taxis and limousine companies to deal with the issues that they're having. I believe we were instrumental in getting that done. Then they don't have to go through all of the red tape with the PUC. They meet monthly, I believe, and they can discuss the issues that they're having with ground transportation, the airport, the city, excise and license, parking meters, you name it. They have a venue to discuss their issues.

It’s such an interesting industry. People that don't work for Union Taxi, they work for the other companies. Some of these folks, their leasing fee to the other taxi companies is like $125-$150 a day. We can't even imagine that. It's like waking up and having to make 125 or more dollars before you even start making money. We can't fathom it. So they have to work really, really hard and really long hours. It's a really unfair system.

When Union Taxi came into play and got their company running, their fees are basically one-third the amount of fees that the other people pay. That gives them more time with their families. It gives a safer service to the public. It gives more quality of work-life for the job. And they get a piece of the American Dream.

Most of these people are immigrants, definitely, mostly African immigrants, but not all. Some are from Romania and European, but most of them are African immigrants. We see that they can be easily taken advantage of because of cultural and language barriers. They just want to feed their families and have a decent life here.

It's [worker cooperatives] kind of spreading throughout the country. CWA has the taxi group in Portland with 50 drivers that started their own company. We also have one in San Jose, California, and now New Jersey is starting up something. There is a really large group that just got affiliated with the AFL-CIO in New York and around some other cities. They have like 18,000 taxi drivers who are part of the Taxi Workers Alliance, the TWA. They're helping them [drivers] with legal assistance and really trying to fight Uber and Lyft and Sidecar and all the other transportation companies that are coming in, you know, just fighting for people to have a better way of life and better living conditions.

Talk about how a recruitment drive works? How do you get folks to the meetings and get folks to sign up for the union?

I have an organizer here named Abdi Buni. He was a taxi driver and worked as the ProTaxi president years ago. He is also an organizer for us, and he knows a lot of people. He was telling me that there is a lot of interest in starting another co-op, and he thought we should do a membership drive. We put out some flyers to some key people and spread the word that CWA is opening its doors to anybody who would like to come join. They started coming in droves.

It was unbelievably perfect timing. They were trying to organize themselves to start another co-op. There were different groups out there. But they knew that if they came to CWA, that we had already been successful in helping Union Taxi, so they see us as a huge asset into the political arena, legislative allies, community allies. We have resources, and they [the drivers] definitely need some rights on the job.

Do Uber and Lyft set their own rates? What are the tensions that come up between traditional drivers and Uber and Lyft drivers?

One of the biggest problems that I personally have with Uber and Lyft, one of the problems -- and this is what they're getting a lot of grief about in the newspaper as well as the Better Business Bureau -- they have what's called surge pricing. Taxicabs are regulated under the PUC, and their rates are set. You can't charge more, but I don't think you can charge less. Your rates are set by the PUC.

So, Uber and Lyft, you download an app to your phone. That was one of the first problems. It's like, okay that's going to discriminate right away against people who don't have a smart-phone: poor people, disabled people, older people, whatever. Anyway, you download an app and then you have to put in your credit card information and personal information when you sign up, because no money changes hands between the driver and the customer. So, if you're downtown or wherever and you want a ride, you pull up an app and you request a ride. You can see if there is an Uber or Lyft driver in the area. Then, they would accept your ride and come pick you up. You can get an estimate on how much your ride will cost, but it's just an estimate, and you've already agreed to pay whatever they say you're going to pay.

So, here are the problems that have been happening around here. Let's say it’s Halloween night. Someone might pay $100 to get downtown, but when you're trying to get home, it could be $400. You don't get to say, “No, I’m not going to pay this," because your credit card is charged as soon as you accept. So, it's the surge pricing, which I call price gouging. It's nothing more than price gouging, which should be illegal. Price gouging is illegal. But that's their model. They call it surge pricing.

That's a huge problem for the public, I think. The other one is safety. I know there's been articles lately, I don't think in Denver, but articles around the country where women have been sexually assaulted. Someone just drives up in a black SUV and says, either, do you want a ride, or I'm your driver. Someone gets in the car, and they're supposed to have a picture posted and all of that. But if you've been out partying, you've not been paying attention to what's going on, and a black SUV drives up and says, "I'm your ride," you're going to get in. The safety issue is huge. They have to do background checks, but you can have somebody that's not really even a driver acting like they're an Uber driver.

What are the benefits of a driver-owned cooperative?

In a co-op, for one, everybody has a vote: one worker, one vote. You get a say-so in the business. You get a say-so in who your boss is by electing them. You get a say-so in the day-to-day business operations, if it's in your bylaws as things you have to have a vote on. Also, there are times you're obviously going to let the board of directors take care of a lot of the business operations, but there are things that they have to pass votes on. By far, the biggest advantage was the lease rate. It was cut by two-thirds almost, at least. So they were working less hours, which gives them more time at home. They were taking home a lot more of their money that they were making, and everybody was contributing the same amount to the business.

How do you think that impacts consumers?

Well, personally, I think that it helps consumers because: 1) The drivers are going to be very safe because they're working less hours; 2) They're going to be invested in customer service because they know it's not just “I'm working for another company. It doesn't matter. It's that every customer that I lose is going to effect my business, because I'm part owner.” And there is the pride of having your own piece of a company.

This seems like an ideal outcome: the worker-controlled business versus the boss controlled business. Do you see this as a step beyond collective bargaining? How does it relate to the union's other work?

What I see is that it certainly levels the playing field between this huge gap between CEOs or the top executives and the average worker. Right now, the average CEO makes 342 times what the average worker makes. That doesn't happen in a co-op.

I just see that it spreads the wealth much more equitably than a normal employer-employee based system. You have a say-so. Instead of just being told, “We're going to do it this way today no matter what you think,” you actually have a vested interest in the business decisions. Your opinion counts.

Does the new company have a name?

I can't really say, because they only have a temporary name, and the group hasn't voted at all. They just assigned a temporary name so they could start to get bonded and insured, and they could get their bank account open. I can't really say. They do, but I don't know if the group will agree, so I'll say “no name” at this point. [Laughs].

Like I said, we've had our first meeting, and then once the 30 days is over on November 25, we'll have to have another meeting with the board of directors. We'll see how many people have joined up with their $500. They'll be able to start looking for a regulatory attorney and someone to draft some bylaws. They'll get a bank account. We're getting the paperwork together for them to be bonded and insured so that people's money will be safe.

It is such an exciting project.

It really is. I'm so excited about it now. I don't know if you've heard about Mondragon. If you go on their website, 1worker1vote.org, it's all about worker co-ops. There is a place where they teamed up with the Steelworkers Union on union co-ops.

Quad - 7, we're kind of lucky because we were ahead of the game. We did this in 2009, and it's starting to get popular right now. I hope to see a lot more of them. I think it could be a new wave of organized labor, if people made their own co-ops, having a say and having a collective bargaining agreement at the same time that deals with benefits, wages, working conditions, that type of thing. It could change our whole economic system.

With this shift toward more contract labor, these taxi-drivers are setting an amazing precedent in the U.S.

Right? What I've heard proponents of this union-worker co-op say is that you find a product that people need and you get a business plan and figure out how to get the capital and things like that, because you have a vested interest in it. They're making very successful companies out of this kind of stuff. A lot of things are happening around this in food, grocery stores, farms, stuff like that. Green energy is another big thing where worker-union co-ops or just worker co-ops are cropping up.

There is a Cincinnati Union Co-Op Initiative. I think there is one in Pittsburgh. I'm just trying to get my feet wet on some of the other things going on outside our own little world. And now people are starting to contact us, which is really exciting. We're sharing information about what we're doing. I believe workers’ rights are human rights, and union co-ops are perfectly aligned with that belief.